How to position your agency's property management provider in the right way [+ podcast]

8 December 2021

Outsourcing property management is a great way for agencies to expand without the need to employ extra team members, but what's the best way to position this service to your landlords? Neil Baldock, Charles David Casson, shares his thoughts.

More agents are realising that they need the lettings side of the business for regular cash flow. It sees you through uncertain times and can help you grow your business, but that benefit competes with increased compliance and the cost of employing extra people. The solution? Use an outsourced property management provider - or, as I like to call it, a property management partner.

The benefits of outsourcing

With full property management outsourced, there are many benefits. If you use a property management partner, you can avoid employing extra staff, which means that you don't have to pay out for a computer, salary or pension, bigger premises, or sick pay.

If you're a self-employed estate agent, outsourcing in lettings becomes even more important. You need to concentrate on business generation, not on renewing tenancy agreements or dealing with broken down boilers - or the compliance. If you're not set up for that or you don't want to over invest in it, that's when you should probably outsource with a property management partner.

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The risk of outsourcing

There is a risk in outsourcing that full service. Take ARPM, for example. ARPM was the UK's largest provider of white labeled, outsourced tenancy management services. It provided the back office function to estate and letting agents across the UK, including property management, rent collection, and all kinds of lettings administration functions.

When it failed, there was uncertainty with agents who didn't know what was happening with their landlords and clients. This uncertainty had a negative impact on agent brands, as landlords may not have been aware that those services were outsourced. That's why positioning the provider in the right way is important - in other words, establishing that provider as a "partner" rather than white labelling the service.

From provider to partner

Agents can understandably be quite precious about their brand. However, if you were to explain to your landlords that they are the end user of a good property management service, achieved with an outsourced partner, then they fully appreciate that honesty - and that's based on feedback from clients that we manage for other agents at Charles David Casson. Those landlords now understand that we are the proxy property management partner and the agent is the letting agent.

If the landlords see value and they're getting a good service, they won't mind that you had a referral fee from the solicitor, for instance - they knew about it and nothing was hidden. Agencies can start to future proof and maintain full transparency with their landlords, with this simple shift in how they position their property management partners.

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Further reading